[dragonwriter]

> I just mean that the law isn't obvious here

Are you seriously arguing that it is plausible that Lambda School has a good faith mistaken belief that they were qualified to participate in federal Title IV financial aid, but somehow made no mention or use of that qualification other than falsely claiming debts to the school were “qualified education loans” with limited dischargeability in bankruptcy?

Or are you claiming that it is not obvious that Title IV financial aid eligibility is a requirement for loans for a school to be qualified education loans?

That...strains credulity.

> "Lambda made a false statement about the California law"

Actually they broke California law by making a false statement of federal law. (“qualified education loan” is a federal-law category that determines both if the loan qualifies for the student loan interest deduction and if it has the “undue-hardship-only” discharge rule im bankruptcy.)